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The Old College Try

COMPANY TOWN

Marketing Firm Goes to School to Woo a Hot Demographic

February 27, 1997|MARLA MATZER | SPECIAL TO THE TIMES

College students are one of the most desirable targets for movie marketers: They account for upward of 25% of box-office receipts, according to industry estimates. Those 18- to 25-year-olds are also considered a prime and malleable audience for marketers of everything from cars to candy. After all, they're upwardly mobile and still in the process of forming brand loyalties that may last a lifetime.

But the college market can also be expensive and hard to reach through traditional media such as network TV and radio because it's a fragmented audience that is often listening to alternative bands on the campus station rather than top 40 music.

Enter Network Event Theatre, a new company with offices in New York and Los Angeles that is combining on-campus entertainment with marketing opportunities for companies such as AT&T and American Express.

The premise is not unique, but the company has a combination of financial muscle and industry pedigree that may give it a leg up in the marketplace. In Los Angeles, NET's point men are Freddie Fields, former MGM head and founder of Hollywood talent agency ICM, and Jerome Hellman, producer of such movies as "Coming Home" and "Midnight Cowboy." Current ICM chief Jeff Berg is on the board.

The first of NET's "Master Director Series" at UCLA on Jan. 21 featured Milos Forman, whom Hellman has known for more than 20 years.

In New York, NET's chief executive is Harlan Peltz, who has done stints at HBO and media investment firm Veronis Suhler. Peltz, 31, had a running start: He's been an investor with his father in New York's venerable Beacon Theater, and his stepfather is John Veronis of Veronis Suhler.

NET launched last year with a plan of staging concerts, films and lectures at colleges across the country, beaming them by satellite to a network of other campuses. Its first movie premiere was R.E.M.'s "Road Movie," a Warner Bros. Records project that received no traditional theatrical release. (It's now on video through Warner/Reprise.)

The Miramax film "Scream" also recently debuted on NET's 36-campus network. The goal, said Fields, is to be in "close to a hundred" campuses by year's end, and 500--reaching as many as 15 million students--within a few years.

NET pays each campus a fee for the use of its facilities, either via a cut of ticket sales or a flat guaranteed fee, as was the case at UCLA, where there was no charge for tickets. It also provides each campus with any needed equipment for the satellite transmission and showing of the programming.

The company has acquired firms specializing in college advertising, and Peltz says these deals allow NET to offer "turnkey" promotional programs to marketers of movies, products and services.

It's an ambitious plan that, if it works, will provide handsome benefits to Peltz, who holds more than 27% of the stock in the Nasdaq-traded company. Nearly three-quarters of the firm's 8.7 million shares are held by company insiders. Shares closed Wednesday at $5, providing the company with a market cap of $43.5 million. So far the company hasn't turned a profit; it lost $1.6 million on revenue of $2.7 million in the last half of 1996.

But NET faces stiff and established competition. Studios, for the most part, want to make money at the box office with their films, rather than basically giving them away at campus screenings. Even with the connections of Fields and Hellman, NET has yet to announce the next director in its "Master Director Series"--top talent is hard to pin down. And other firms, including the 12-year-old Burbank firm Hogan Communications, are well-entrenched in the business.

Hogan President Michael Hogan was invited to the Forman event by his friend Fields. While he was impressed with the quality of the event, Hogan expressed some skepticism.

"The independent studios have no budgets, and certain types of films are almost impossible to get corporate sponsors for," said Hogan, who says that about 60% of his business comes from corporate sponsors rather than studio money. "Miramax tried to get us to do a couple of their movies, including 'Scream,' but we just couldn't get the sponsors."

Hogan said he's seen a number of firms come and go in his years in the business. Like NET, Hogan Communications mounts campus screenings and promotions. Its corporate partners include Chevrolet, which recently sponsored screenings of Sony's "Jerry Maguire" on 60 campuses around the country. Along with the movie, Chevy showed its latest models.

Peltz says NET's next step will be programming. "We're really dabbling right now. We're not a production company; we know the programming is there. But I expect to either create a production company or do an overall deal with a production company."

Peltz says one likely venture is an animation festival, where NET would take submissions from student filmmakers and retain rights. Another possibility: a similar deal with an independent film company.

"We have a laboratory. We have a lot to offer besides money," he said.

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